Employing a think-local, act-local multidomestic strategy is highly questionable when

1

Because buyer tastes for a particular product or service sometimes differ substantially from country to country,

companies operating in a global marketplace must wrestle with whether and how much to customize their offerings in each different country market to match the tastes and preferences of local buyers or whether to pursue a strategy of offering a mostly standardized product worldwide.

2

Which of the following is not a potential benefit of collaborative strategies involving alliances and/or joint ventures with foreign partners?

Greater ability to employ offensive strategies and build well-protected profit sanctuaries

3

Which of the following qualifies as an offensive strategy for companies competing internationally or globally?

Attacking the profit sanctuaries of rival companies

4

Which of the following is the most unlikely element of a "think global, act global" approach to strategy-making?

Selling different product versions under different brand names

5

According to Figure 7.2, which one of the following does not accurately characterize the differences between a localized multicountry strategy and a global strategy?

A localized multicountry strategy involves competing on the basis of the same competencies and resource capabilities in each country market where it operates whereas a global strategy entails rapid cross-country transfers of new ideas, products, and capabilities.

6

Which of the following is not one of the primary strategy options for competing in the markets of foreign countries?

Employing a multiple cross-country strategy that involves strategic alliances, joint ventures, and other cooperative agreements with foreign companies

7

Multicountry competition refers to a market situation where

there's so much cross-country variation in market conditions and in the companies contending for leadership that the market contest among rivals in one country is localized to that country and not closely connected to the market contests in other countries.

8

The advantages of using a franchising strategy to pursue opportunities in foreign markets include

having franchisees bear most of the costs and risks of establishing foreign locations and requiring the franchiser to expend only the resources to recruit, train, support, and monitor foreign franchisees.

9

Which one of the following is not a reason why a company decides to enter foreign markets?

To build the profit sanctuaries necessary to wage guerilla offensives against global challengers endeavoring to invade its home market

10

In which of the following situations is employing a "think local, act local" multicountry strategy highly questionable?

When a company is striving to build a globally recognized brand name for one of its products or services

11

A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign markets

becomes more cost competitive in selling its exported goods in foreign markets when the U.S. dollar declines in value against the currencies of the countries to which it is exporting.

12

Competing in one or more countries or regions of the world causes strategy-making to be more complex because of

differing governmental policies and regulations from country to country and the risks of adverse shifts in currency exchange rates.

13

The classic reason for locating a particular value chain activity in a particular country is

to achieve low costs in performing that activity.

14

A company that has competitively powerful resources and capabilities can enhance its competitiveness internationally and perhaps build competitive advantage by

transferring a portion of these resources and capabilities from its operations in one country to its operations in other countries because the cost of sharing or transferring already developed resources and capabilities across country borders is low in comparison to the time and considerable expense it takes for a country subsidiary to build matching capabilities on its own.

15

Which of the following is not among the important strategic issues associated with competing across national boundaries?

How best to revamp the company's value chain in order to facilitate achievement of a global competitive advantage

Chapter 07 Strategies for Competing in International Markets

Corto Captulos 7 y 8Direccin Estratgica

MAI

Nombre: Alba Rosina Sagastume MurallesCarn: 11822051.The generic strategic options for competing in foreign markets includeA.global low-cost, global differentiation, global best-cost, and global focus strategies.B.maintaining a national (one-country) production base and exporting goods to foreign markets.C.licensing foreign firms to produce and distribute one's products or to use the company's technology.D.a custom-tailored country-by-country approach based on meeting the particular needs of particular buyers in each target country.E.All of these.2.Which of the following is not one of the generic strategy options for competing in the markets of foreign countries?A.A profit sanctuary strategyB.An export strategyC.A global strategyD.A multicountry strategyE.A franchising strategy

3.Which of the following are generic strategy options for competing in foreign markets?A.Maintaining a national (one-country) production base and exporting goods to foreign marketsB.Global strategies keyed either to low-cost or differentiationC.Franchising and licensing strategiesD.A multicountry strategy (where a company pursues a custom-tailored country-by-country approach in accordance with local competitive conditions and buyer tastes and preferences)E.All of these4.Which of the following are(is) not generic strategy options for competing in foreign markets?A.An export strategy and a multidomestic strategyB.Global strategies keyed either to low-cost or differentiationC.Cross-border transfer strategies and home-field advantage strategiesD.Using strategic alliances and joint ventures with foreign competitors as the primary vehicles for entering and competing in foreign marketsE.Franchising and licensing strategies

5.Using domestic plants as a production base for exporting goods to selected foreign country marketsA.can be an excellent initial strategy to test the international waters and learn if attractive market positions can be established in foreign markets.B.can be a competitively successful strategy when a company is focusing on vacant market niches in each foreign country and does not have to compete head-to-head against strong host country competitors.C.can be a powerful strategy since a company can maintain a one-country production base allowing it to capitalize on company competencies and capabilities.D.is usually a weak strategy when competitors are pursuing multi-country strategies.E.can be a powerful strategy because a company is not vulnerable to fluctuating exchange rates.

6.The advantages of using an export strategy to build a customer base in foreign markets includeA.being able to minimize shipping costs, avoid tariffs, and curb the effects of fluctuating exchange rates.B.minimizing risk and capital requirements.C.being cheaper and more cost effective than licensing and franchising.D.being cheaper and more cost effective than a multicountry strategy.E.being more suited to accommodating local buyer tastes and host government regulations than a global strategy.

7.When a company operates in the markets of two or more different countries, its foremost strategic issue isA.whether to use strategic alliances to help defeat its rivals.B.whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries.C.whether to maintain a national (one-country) manufacturing base and export goods to the other countries.D.choosing which foreign companies to team up with via strategic alliances or joint ventures.E.whether to test the waters with an export strategy before committing to some other competitive approach.

8.A "think local, act local" multidomestic type of strategyA.is very risky, given fluctuating exchange rates and the propensity of foreign governments to impose tariffs on imported goods.B.is usually defeated by a "think global, act global" type of strategy.C.becomes more appealing the bigger the country-to-country differences in buyer tastes, cultural traditions, and market conditions.D.is generally an inferior strategy when one or more foreign competitors is pursuing a global low-cost strategy.E.can defeat a global strategy if the "think local, act local" multicountry strategist concentrates its efforts exclusively in those foreign markets which have superior resources.

9.The strength of a "think local, act local" multidomestic strategy is thatA.it matches a company's competitive approach to prevailing market and competitive conditions in each country market, country by country.B.each of a company's country strategies is almost totally different from and unrelated to its strategies in other countries.C.the plants located in different countries can be operated independent of one another, thus promoting greater achievement of scale economies.D.it avoids host country ownership requirements and import quotas.E.it eliminates the costs and burdens of trying to coordinate the strategic moves undertaken in one country with the moves undertaken in the other countries.

10.A "think local, act local" multidomestic strategy works particularly well whenA.host governments enact regulations requiring that products sold locally meet strictly-defined manufacturing specifications or performance standards.B.there are significant country-to-country differences in customer preferences and buying habits.C.diverse and complicated trade restrictions of host governments preclude the use of a uniform strategy from country-to-country.D.there are significant country-to-country differences in distribution channels and marketing methods.E.All of these.

11.A "think-local, act local" multidomestic strategy entailsA.a narrow product line aimed at serving buyers in the same segments of country markets worldwide.B.giving local managers considerable strategy-making latitude and often producing different product versions for different countries.C.aggressive efforts to locate facilities in those country markets which have superior resources.D.pursuing strong product differentiation and competing in many buyer segments.E.extensive efforts to transfer a company's competencies and resource strengths from one country to another so as to keep entry costs into new country markets low.

12.In which of the following situations is employing a "think local, act local" multidomestic strategy highly questionable?A.When a company wished to transfer competencies and resources across country boundaries and is striving to build a single, uniform competitive advantage worldwideB.When there are significant country-to-country differences in customer preferences and buying habits industry is characterized by big economies of scale and strong experience curve effectsC.When the trade restrictions of host governments are diverse and complicatedD.When there are significant country-to-country differences in distribution channels and marketing methodsE.When host governments enact regulations requiring that products sold locally meet strictly-defined manufacturing specifications or performance standards

13.The basic strategy options for local companies in competing against global challengers includeA.best-cost provider, focused low cost, and low-cost leadership strategies.B.export strategies, licensing strategies, and cross-border transfer strategies.C.utilizing keen understanding of local customer needs and preferences to create customized products or services, developing business models to exploit shortcoming in local infrastructure, and using acquisitions and rapid growth to defend against expansion-minded multinationals.D.franchising strategies, multidomestic strategies keyed to product superiority, global low-cost leadership strategies, and cross-border coordination strategies.E.focused differentiation and broad differentiation strategies.

14.The best strategy options for a local company in competing against global challengers includeA.locating buyer related activities, such as sales, advertising, or technical assistance, close to buyers.B.export strategies, entering into alliances and/or joint ventures with one or more foreign companies having globally competitive strengths, and/or cross-border transfer strategies.C.export strategies, licensing strategies, franchising strategies, and cross-market coordination strategies.D.using understanding of local customer preferences to create customized products or services, transferring the company's expertise to cross-border markets, and/or using acquisitions and rapid growth strategies to defend against expansion-minded multinationals.E.offensives aimed at the global challengers' strengths, promoting anti-dumping legislation, and/or launching some type of guerilla warfare strategy.

15.Which of the following is not a viable strategy option for a local company in competing against global challengers?A.Using cross-market transfer strategies to hedge against the risks of exchange rate fluctuations and adverse political developmentsB.Developing business models to exploit shortcoming in local distribution networks or infrastructureC.Taking advantage of low-cost labor and other competitively important local work-force qualitiesD.Transferring a company's expertise to cross-border markets and initiating actions to contend on a global scaleE.Using acquisitions and rapid growth strategies to defend against expansion-minded multinationals16.The task of crafting corporate strategy for a diversified company encompassesA.picking the new industries to enter and deciding on the means of entry.B.initiating actions to boost the combined performance of the businesses the firm has entered.C.pursuing opportunities to leverage cross-business value chain relationships and strategic fits into competitive advantage.D.establishing investment priorities and steering corporate resources into the most attractive business units.E.All of these.17.Which one of the following is not one of the elements of crafting corporate strategy for a diversified company?A.Picking new industries to enter and deciding on the means of entryB.Choosing the appropriate value chain for each business the company has enteredC.Pursuing opportunities to leverage cross-business value chain relationships and strategic fits into competitive advantageD.Establishing investment priorities and steering corporate resources into the most attractive business unitsE.Initiating actions to boost the combined performance of the businesses the firm has entered

18.Diversification merits strong consideration whenever a single-business companyA.has integrated backward and forward as far as it can.B.is faced with diminishing market opportunities and stagnating sales in its principal business.C.has achieved industry leadership in its main line of business.D.encounters declining profits in its mainstay business.E.faces strong competition and is struggling to earn a good profit.

19.Diversification becomes a relevant strategic option when a companyA.spots opportunities to expand into industries whose technologies and products complement its present business.B.can leverage existing competencies and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.C.has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits of such businesses.D.can open up new avenues for reducing costs by diversifying into closely related businesses.E.All of these.20.Diversification ought to be considered whenA.a company's profits are being squeezed and it needs to increase its net profit margins and return on investment.B.a company lacks sustainable competitive advantage in its present business.C.a company begins to encounter diminishing growth prospects in its mainstay business.D.a company has run out of ways to achieve a distinctive competence in its present business.E.a company is under the gun to create a more attractive and cost-efficient value chain.

21.Diversification becomes a relevant strategic option in all but which one of the following situations?A.When a company spots opportunities to expand into industries whose technologies and products complement its present business.B.When a company is only earning a low profit margin in its principal business.C.When a company has a powerful and well-known brand name that can be transferred to the products of other businesses and thereby used as a lever for driving up the sales and profits of such businesses.D.When a company can open up new avenues for reducing costs by diversifying into closely related businesses.E.When a company can leverage existing competencies and capabilities by expanding into industries where these same resource strengths are key success factors and valuable competitive assets.

22.A company can best accomplish diversification into new industries byA.outsourcing most of the value chain activities that have to be performed in the target business/industry.B.acquiring a company already operating in the target industry, creating a new business subsidiary internally to compete in the target industry, or forming a joint venture with another company to enter the target industry.C.integrating forward or backward into the target industry.D.shifting from a strategic group comprised mostly of single-business companies to a strategic group comprised of diversified companies.E.employing an offensive strategy with new product innovation as its centerpiece.

23.The most popular strategy for entering new businesses and accomplishing diversification isA.forming a joint venture with another company to enter the target industry.B.internal startup.C.acquisition of an existing business already in the chosen industry.D.forming a strategic alliance with another company to enter the target industry.E.None of thesestrategic alliances and joint ventures are equally popular and rank well ahead of acquisition and internal start-up in terms of frequency of use.

24.Acquisition of an existing business is an attractive strategy option for entering a promising new industry because itA.is an effective way to hurdle entry barriers, is usually quicker than trying to launch a brand-new start-up operation, and allows the acquirer to move directly to the task of building a strong position in the target industry.B.is less expensive than launching a new start-up operation, thus passing the cost-of-entry test.C.is a less risky way of passing the attractiveness test.D.is more likely to result in passing the shareholder value test, the profitability test, and the better-off test.E.offers the prospect of gaining an immediate competitive advantage in the new industry and thus helps ensure that the diversification move will pass the competitive advantage test for building shareholder value.

25.An acquisition premium is the amount by which the price offered for an existing business exceedsA.the pre-acquisition market value of the target company.B.the fair market value of similar companies in the same geographic locale.C.the comparable value of similar companies within the same market.D.the amount paid as a down payment to be held in escrow until closing.E.the difference between the amount that was offered and the amount that is escrowed.

26.Internal development of a new business subsidiary can be a more attractive means of entering a desirable new business than is acquiring an existing firm already in the targeted industry whenA.the company has ample time and adequate resources to launch the new internal start-up business from the ground up.B.there is a small pool of desirable acquisition candidates.C.the target industry is growing rapidly and no good joint venture partners are available.D.all of the potential acquisition candidates are losing money.E.the target industry is comprised of several relatively large and well-established firms.

27.Which one of the following is not a factor that makes it appealing to diversify into a new industry by forming an internal start-up subsidiary to enter and compete in the target industry?A.When internal entry is cheaper than entry via acquisition.B.When a company possesses the skills and resources to overcome entry barriers and there is ample time to launch the business and compete effectively.C.When adding new production capacity will not adversely impact the supply demand balance in the industry by creating oversupply conditions.D.When the industry is growing rapidly and the target industry is comprised of several relatively large and well-established firms.E.When incumbent firms are likely to be slow or ineffective in combating a new entrant's efforts to crack the market.

28.Diversifying into a new industry by forming a new internal subsidiary to enter and compete in the target industry is attractive whenA.all of the potential acquisition candidates are losing money.B.it is impractical to outsource most of the value chain activities that have to be performed in the target business/industry.C.there is ample time to launch the new business from the ground up and entry barriers can be hurdled at acceptable cost.D.the company has built up a hoard of cash with which to finance a diversification effort.E.none of the companies already in the industry are attractive strategic alliance partners.

29.A joint venture is an attractive way for a company to enter a new industry whenA.a firm is missing some essential skills or capabilities or resources and needs a partner to supply the missing expertise and competencies or fill the resource gaps.B.it needs access to economies of scope and good financial fits in order to be cost-competitive.C.it is uneconomical for the firm to achieve economies of scope on its own initiative.D.the firm has no prior experience with diversification.E.it has not built up a hoard of cash with which to finance a diversification effort.

30.A joint venture is an attractive way for a company to enter a new industry whenA.the pool of attractive acquisition candidates in the target industry is relatively small.B.it needs better access to economies of scope in order to be cost-competitive.C.the industry is growing slowly and adding too much capacity too soon could create oversupply conditions.D.the firm has no prior experience with diversification and the industry is on the verge of explosive growth.E.the opportunity is too risky or complex for a company to pursue alone, a company lacks some important resources or competencies and needs a partner to supply them, and/or a company needs a local partner in order to enter a desirable business in a foreign country.

What is a primary drawback of a localized Multidomestic strategy?

Which of the following are considered disadvantages of a Multidomestic strategy?

What is the major advantage of Multidomestic strategy?

Which of the following are among the basic strategies that companies can use to compete in the global marketplace?